Peter – you obviously got your start in penny stock investing at a very early age, can you talk to me a little about how you got into investing and more importantly penny stocks vs. blue chip?
I thought I could make lots of money easily with penny stocks, so I invested all my money into one when I was 14 years old. I lost ALL of it within 2 weeks! So, I took a step back, read all kinds of books about stocks, and started ‘paper trading’ penny stocks with an imaginary $100,000. Once I got pretty good at it, I got back into trading penny stocks with real money.
I’ve always liked penny stocks more than blue chips and large cap companies, because penny stocks move quicker and produce larger gains.
I love your quote, “A great company is born in dreams, built on aspiration, and balanced upon ethics.” Not too many companies focus on ethics, especially in this industry, can you talk a bit about that and why this is so critical to your success.
Most players in penny stocks get paid by companies to promote their shares, others tell people to buy the same penny stocks that they are selling at the time. It is an industry full of dishonest people, who make money by tricking unsuspecting, naive, or trusting investors.
I decided long ago that I would rather fail doing things ethically than succeed by taking advantage of others. Turns out that was a great choice, because it is the commitment to ethics that has been the greatest differentiating factor between us and all the others, and our greatest key to success.
Penny stocks newsletters have always had a stigma associated with them, with the pump and dump and SEC issues – what sets you and your publication apart from all the rest?
Unlike the vast majority, we do not get paid by the penny stocks we analyze. We also do not own shares in the penny stocks we review. We are 100% unbiased, and have zero vested interest. We just love finding good quality companies, and each successful pick builds our reputation even further.
What events in your life do you feel have contributed most to your success?
Losing all my money in 2 weeks was the best, most important education I could have gotten. It didn’t feel like it at the time, but I realize now that it was absolutely pivotal.
I also have spent most of my life dealing with Multiple Sclerosis (MS), which has put me in a very humble, appreciative place, which transcends through everything I work on.
What has been your biggest failure and more importantly, what were you able to take away from it to ensure that it doesn’t happen again?
Again, losing $3,600 in two weeks (money I worked for and saved, not money that was given to me) was both my biggest failure and greatest success. Everything that is good about my investing style now can be traced back to that event, and all the ways I’ve learned are the ways that ensure that it will not happen again.
I have always looked at Warren Buffet and his investment approach – who are some of the investors/people you look up to and admire and why?
I look at many gurus, including Buffet, but I never follow everything they say. Rather, I pick out the parts of their strategies that I like, and ignore the rest. Besides Buffet, I’ve read or followed Peter Lynch, Marc Faber, Peter Schiff, and Chris Martenson, among many, many others. I admire all of them, because the people I follow all seem genuine, and are not about their own egos.
What type of person/investor should look into penny stocks – as we all know they are a risky proposition right?
Penny stocks are not for everyone. They are risky. However, you can dramatically lower your risk if you know what types of penny stocks to avoid. For us, the number of penny stocks to avoid is 95%, while the other 5% will absolutely change your life.
What are some factors that an investor should look at when looking to invest in penny stocks and or subscribe to a penny stock newsletter?
Make sure they are 100% Unbiased (meaning they don’t own shares they talk about, and don’t get paid by the companies to promote their shares). Also, make sure to get a free trial – the ones that don’t offer a trial know that you would never subscribe if you saw what they offered.
Any “tip” for my readers? ;-)
Lots of tips and you can see them all for free by taking a trial. In the mean time, only focus on great quality penny stocks that are fundamentally solid. Penny stocks like this do exist, but make sure they have a really strong financial position, and enjoy growing market share in an industry with high barriers to entry.